CON-3-01 CON-3-05
OT:RR:CTF:ER-H033175 ECD
Mr. Lawrence J. Mruk
Supervisory Import Specialist, Protest Review Office
U.S. Customs and Border Protection
726 Exchange Street, Suite 400
Buffalo, New York 14210
RE: Applicability of Antidumping Duties to Merchandise Imported under Subheading 9801.00.20, Harmonized Tariff of the United States
Dear Mr. Mruk,
On June 30, 2008 you requested Internal Advice concerning the applicability of antidumping duties to merchandise that is within the scope description of a current antidumping duty order, but is being entered under subheading 9801.00.20, Harmonized Tariff of the United States (“HTSUS”). Our decision follows, and we apologize for the delay.
FACTS:
Shipments of ball bearings from Italy are being entered through the Port of Buffalo. They were originally imported directly from Italy to the United States, and were then subject to an antidumping duty order covering ball bearings and parts thereof from Italy. See Antidumping Duty Orders: Ball Bearings and Cylindrical Roller bearings, and Parts Thereof From Italy, 54 Fed. Reg. 20903 (May 15, 1989)(“Antidumping Duty Order”); Ball Bearings and Parts Thereof From France, Germany, Italy, Japan, and the United Kingdom: Final Results of Antidumping Duty Administrative Reviews and Rescission of Reviews in Part, 73 Fed. Reg. 52823 (September 11, 2008)(“2006-2007 Administrative Reviews”). When the imports were entered for consumption, all regular duties, antidumping duties, and fees were paid.
According to your letter, the importer used to store the ball bearings in a warehouse in the United States. Recently, the importer closed its warehouse in the United States, and transferred the previously imported inventory to a customs bonded warehouse in Canada. The Canadian customs bonded warehouse did not purchase or take title of the merchandise, and the merchandise was not advanced in value or improved in condition. The importer and the Canadian customs bonded warehouse have a “bailor/bailee relationship,” and the warehouse held the merchandise in exchange for payment of warehousing fees. The same importer entered the bearings from Italy into the United States, shipped them to a bonded warehouse in Canada, and “anticipated reimporting some or the entire inventory back into the United States.” Some ball bearings from Italy have entered under subheading 9801.00.20, HTSUS, and liquidation has been extended pending a decision as to whether these ball bearings are subject to antidumping duties.
ISSUES:
Whether CBP or the U.S. Department of Commerce determines what merchandise is subject to antidumping duties when the merchandise is classified as articles exported and returned, not advanced or improved in condition, under subheading 9801.00.20.
LAW AND ANALYSIS:
For purposes of this decision, it is assumed that the ball bearings meet the requirements of HTSUS 9801.00.20, HTSUS, pursuant to 19 C.F.R. § 10.108. Nevertheless, the tariff classification of merchandise does not necessarily determine whether that merchandise is subject to an antidumping or countervailing duty order. Rather, the U.S. Department of Commerce (“Commerce”), the administrating authority of the antidumping laws, determines what merchandise is subject to an antidumping duty order, regardless of the tariff classification for that merchandise.
Goods classified under 9801.00.20, HTSUS, are not exempt automatically from antidumping duties. Antidumping duties differ from other duties assessed on merchandise. First, they are specifically exempted from customs drawback laws. See 19 U.S.C. § 1677h (“For purposes of any law relating to the drawback of customs duties, countervailing duties and antidumping duties imposed by this subtitle shall not be treated as being regular customs duties.”). Second, it is Commerce, not CBP, that “conducts the antidumping duty investigation, calculates the antidumping margin, and issues the antidumping duty order” and “Commerce is the ‘master of the antidumping law.’” See Mitsubishi Elecs. Am., Inc. v. United States, 44 F.3d 973, 976 (Fed. Cir. 1994); Thai Pineapple Public Co., ltd. v. United States, 187 F.3d 1362, 1365 (Fed. Cir. 1999)(citations omitted). Third, the decision of whether goods are subject to an antidumping duty order is made by Commerce, and CBP’s role is to follow Commerce’s directions. CBP has only a ministerial role in liquidating antidumping duties, and “may not independently modify, directly or indirectly the determinations {made by Commerce}, their underlying facts, or their enforcement.” Royal Business Machs. Inc. v. United States, 507 F. Supp. 1007, 1014 n.18 (Ct. Int’l Trade 1980); see also Mitsubishi Elecs. Am. Inc., 44 F. 3d at 977 (“Customs merely follows Commerce’s instructions in assessing and collecting duties. . . . Customs has a merely ministerial role in liquidating antidumping duties.”).
Finally, Commerce determines whether a particular kind of merchandise is covered by an existing antidumping or countervailing duty order, and Customs makes the “factual findings to ascertain what the merchandise is and whether it is described in an {antidumping duty} order.” Xerox Corp., 289 F.3d at 794. The U.S. Court of Appeals for the Federal Circuit has held that only Commerce has the authority to determine whether specific merchandise is subject to an antidumping or countervailing duty order, or a suspension agreement. Xerox Corp. v. United States, 289 F.3d 792, 794-95 (Fed Cir. 2002). Commerce issues scope rulings to determine whether merchandise is included within the scope of an antidumping or countervailing duty order or a suspended investigation. See 19 C.F.R. § 351.225. The tariff classification is irrelevant for determining whether merchandise is subject to an antidumping duty order, unless Commerce specifically states that tariff classification is part of the determination of whether merchandise is subject to an antidumping duty order. The U.S. Court of International Trade has stated, “It is well settled that a tariff classification by the Customs Service does not govern an antidumping determination regarding class or kind.” Torrington Co. v. United States, 745 F. Supp. 718, ---, 14 C.I.T 507, 512-513 (Ct. Int’l Trade 1990)(citations omitted) aff’d 938 F.2d 1276 (Fed. Cir. 1991).
In the case of the antidumping duty order covering ball bearings from Italy, Commerce has stated that although it provides tariff classification item numbers, “for convenience and customs purposes, the written descriptions of the scope of these orders remain dispositive.” See 2006-2007 Administrative Reviews, 73 Fed. Reg. at 52824. The memorandum regarding scope determinations referred to in the 2006-2007 Administrative Reviews notice does not mention ball bearings entered under subheading 9801.00.20, HTSUS. See “Memorandum to Laurie Parkhill” of April 30, 2008 (referenced in 2006-2007 Administrative Reviews, 73 Fed. Reg. at 52824.). No instructions have been posted that indicate that Commerce made a scope determination to exclude ball bearings entered under subheading 9801.00.20, HTSUS. CBP has no authority to determine independently from Commerce that ball bearings entered under subheading 9801.00.20, HTSUS, are exempt from antidumping duties; therefore, CBP has ascertained that the goods are ball bearings from Italy, and they are covered by Commerce’s antidumping duty order and subsequent scope rulings. That the ball bearings may be entered under subheading 9801.00.20, HTSUS, is irrelevant for purposes of antidumping duties, unless the scope of the antidumping duty order specifically excludes goods entered under subheading 9801.00.20, HTSUS.
Commerce must decide the issue of whether reimported merchandise is subject to an antidumping order, because the issue goes to the heart of any antidumping determination: whether there was a sale at less than fair value. Antidumping duties are imposed upon a class or kind of merchandise when Commerce determines the merchandise is sold or likely to be sold at less than fair value, and when the International Trade Commission determines that imports, or sales, or likelihood of sales for importation of the class or kind of merchandise materially injures or threatens to injure materially an industry in the United States. See 19 U.S.C. § 1673. The dumping margin is the “amount by which the normal value exceeds the export price or constructed export price of the subject merchandise.” See 19 U.S.C. § 1677(35)(A). It is for Commerce to determine what constitutes a sale. See United States v. Eurodif S.A., --- U.S. ---, 129 S. Ct. 878, 886-890, 172 L. Ed. 2d 679, 689-693 (2009)(citing 19 U.S.C. § 1677(1)). In determining what constitutes a sale, Commerce determines whether goods are re-exported:
The statutory scheme clearly places the responsibility for making determinations concerning re-exportation of merchandise on Commerce rather than on Customs. . . . Further, the question of whether merchandise was re-exported is a factual question subject to Commerce’s verification.
NTN Bearing Corp. of Am. v. United States, 905 F. Supp. 1083, 1089 (Ct. Int’l Trade 1995).
Commerce’s antidumping proceedings demonstrate that Commerce must resolve whether reimported merchandise is subject to antidumping duties. For example, Commerce has included in its antidumping administrative review sales of goods that entered the United States under a temporary importation bond (“TIB”) and were subsequently re-exported to Canada, because, pursuant to Article 303(3) of the North American Free Trade Agreement (“NAFTA”), such merchandise is considered to be entered for consumption. See Notice of Final Determination of Sales at Less than Fair Value: Certain Cut-To-Length Carbon-Quality Steel Plate Products from Italy, 64 Fed. Reg. 73234, 73239-72340 (December 29, 1999). However, Commerce has also excluded TIB entries that were re-exported to Canada, because there was no sale, and ultimately rescinded an administrative review and directed legacy Customs to liquidate the entries at issue without regard to antidumping duties. See Oil Country Tubular Goods From Japan: Preliminary Results and Recission {sic} in Part of Antidumping Duty Administrative Review, 64 Fed. Reg. 48589, 48591 (September 7, 1999), unchanged in Oil Country Tubular Goods From Japan; Final Results of Antidumping Duty Administrative Review, 65 Fed. Reg. 15305 (March 22, 2000). Because Commerce determines whether goods are re-exported without a sale in the United States, Commerce must also decide whether goods are reimported into the United States pursuant to an alleged single sales transaction that Commerce may have already considered in an administrative review.
CBP has no authority to determine whether goods that were reimported into the United States are exempt from antidumping duty liability; Commerce has the statutory mandate to determine whether goods were re-exported without a sale, and whether they may be reimported without liability for antidumping duties. Importers do have recourse if they believe their merchandise is not subject to an antidumping duty order: they may request that Commerce conduct an administrative review or issue a scope ruling covering specific entries. See 19 C.F.R. § 351.213(b) and 351.225. Any exemption from antidumping duties must come from Commerce. Therefore, CBP will assess antidumping duties on merchandise subject to antidumping duty orders in accordance with Commerce’s antidumping duty determinations and directions, not the tariff classification.
HOLDING:
Goods entered under subheading 9801.00.20, HTSUS, which fall within the scope of an antidumping duty order, remain liable for antidumping duties, unless Commerce directs CBP otherwise.
You are to mail this decision to the importer no later than 60 days from the date of this letter. On that date, the Office of International Trade will make the decision available to CBP personnel, and to the public on the CBP Home Page on the World Wide Web at www.cbp.gov, by means of the Freedom of Information Act, and other methods of public distribution.
Sincerely,
Myles B. Harmon, Director
Commercial and Trade Facilitation Division